Our First Deceased Borrower - Cleveland, OH

Purchase Date: 20 SEP 16

JV Funding Date: 21 NOV 16

Sale Date: 01 MAY 17 

Initial Closing of Books - 29 JUL 17 - Took over two months to collect the money from the sheriff.

Note Cost: $14,001

Estimated Workout Costs: $9,440 

Total Investment: $23,440

Check from Sheriff: $32,022.23

Actual Workout Costs: $6,003.64

Profit after costs: $6,308.79 each

Return for JV: 27% (35.5% if we collect the rest from Sheriff)

Annualized Return for JV: 40%

It took a while for us to get this note. After two offers that were accepted, they were pulled from us because someone locked up the entire pool. Both times that sale didn't go through. We got this note on the third try. Our realtor told us to get this note because the neighborhood was gentrifying. We also knew the borrower was deceased and we would go to foreclosure.
Since this was our first deceased borrower, we expected the timeline to be longer and the costs to be higher. It wasn't. The foreclosure process was almost done. We had to get substituted onto the complaint and then we could get a sale date. Since there had already been several substitutions, this part took some time, and it was March before we were on the complaint. Our sale date was set for May 1. 
Even though the borrower was deceased, someone was living there. We figured it might be a tenant. We didn't know if they were paying rent or to who. Our thought was that if someone is living there, then the copper thieves won't make an appearance. We left the person alone.In this time since we bought the note, tear downs were selling for $80,000. We thought if we could win at auction, then we might get an additional $20,000 if we listed it on MLS As-Is. We prepaid taxes and paid for every little bit of property preservation we could find to get our bid up. We lost at $40,500. Even though we lost, our JV partner realized a 27% return.There is still $4,117 that the sheriff held after the sale. It was to go to liens and then the borrowers. We are still owed that money, so we have petitioned the sheriff to collect that money. If we do, then the JV and AJA Investments will split it 50/50. That would take our JV's ROI up to 35.5%